Tag Archives: Book Review

Abinaswar Das

The Development Dictionary is a book that arouses the reader’s interest at every juncture because of its blunt statements backed by the immense knowledge and varied ethnic, socio-political and cultural origins and experiences of its seventeen contributing authors. This group claims to have observed and studied the development discourse and through their studies have arrived at the controversial conclusion that the end of development, as we know it has arrived. In a bold yet nonchalant manner, Wolfgang Sachs, the editor of the book and contributor of two chapters, concludes his introduction to the book, declaring that it is in fact time to write the obituary of the development process. The introduction of the book begins with the following sentences: “The last forty years can be called the age of development. This epoch is coming to an end. The time is ripe to write its obituary.”

Each of the chapters comprises an essay by the concerned contributor about a concept attached to the development discourse and/or process. The Chapters are alphabetically arranged; therefore justifying the name of the book as a dictionary. The first Chapter is on the idea of development, where Esteva talks about how although development was earlier discussed in intellectual circles for a long time, it only became part of mainstream ideology when it was sold to the world through Truman’s speech in 1949, which suddenly created two worlds from one. This speech was so powerful that it divided the world into the developed and the underdeveloped world. The contributors to The Development Dictionary trace the beginning of the “Age of Development” to this speech of Truman’s. Development theorists believed their prescription would lift the world’s population out of perceived poverty and misery by turning peasants and subsistence farmers into wage-earners and consumers. Development was marketed as the ideal to achieve through any means necessary.

In the second Chapter, Sachs addresses the issues related to the environment, which he argues have taken a back seat in the development process. He says that environmental concerns were not part of the initial idea or plan of development. The environment began to matter only when a significant increase in pollution and environmental degradation caused by excessive harnessing and exploitation of resources came to the forefront in both developed as well as developing countries. The damage done to the environment through depletion of nonrenewable resources led to the era of sustainable development, which he also critiques. The idea of equality is explored in the subsequent chapter by Lummis, wherein he begins by making clear distinctions between the idea of equality, equity and equitability. He argues that the proponents of the development process have successfully managed to make people believe that development creates more opportunities and therefore mitigates the problem of socio-economic inequalities. Lummis, however, backs with research, data that developing countries have instead much larger income and spending inequalities than they had before they joined the bandwagon with their development programmes. He, therefore, finds a great paradox in what development claims to have achieved and what the ground realities have been.

In “Helping”, Gronemeyer attempts to expose the patriarchal dominance of developed countries over developing nations through financial aid. She explains how developed countries enter the economy and even influence governments as a result of aid provided to developing countries and attempt to induce socio-political and cultural changes in that country. She argues that this is not only an extremely unethical way to economically invade a nation, but also violates the principle of sovereignty of an independent nation. Berthoud explains and explores the role of the market in the development process, which he admits is the most significant aspect of the development discourse. His essay is about the establishment of economies through the setting up of markets and the resultant discriminatory practices by international financial organisations and trade regulatory bodies that allow for a nascent economy to be exploited rendering it helpless and entirely dependent on the biggest players in the market, who are often powerful enough to overthrow governments.

Subsequent chapters by Illich, Sachs, Rahnema and Escobar focus on the creation of the idea of ‘Needs’ by the development discourse, as well as the One World theory, participation in the development process as well as planning as an integral part of any country’s development. All of these notions call for policies that are a result of existing models of the West. They assert that it is time for a new era of development where every nation is given the space and opportunity to keep its national interests before interests of the market and the Western economic powers.

Current use of “development” simplifies the term to the point where the end purpose of the process becomes nothing more than the achievement of the U.S. model of an industrial money economy. The traditional meaning of the word, evolved from biology and philosophy, from Darwin, Hegel and Marx, was all but wiped out when the term was co-opted by Truman.

Gustavo Esteva writes, “Two hundred years of social construction of the historical-political meaning of the term, development, were successfully usurped and transmogrified. A political and philosophical proposition of Marx, packaged American style as a struggle against communism and at the service of the hegemonic design of the United States, succeeded in permeating both the popular and intellectual mind for the rest of the century.”

Contributors blast the idea that the U.S. (and European) model represents the ideal goal of the historical process. Wolfgang Sachs writes, “If all countries successfully followed the industrial example, five or six planets would be needed to serve as mines and waste dumps. It is thus obvious that the advanced societies are no model; rather they are most likely to be seen in the end as an aberration in the course of history.”

The contributors argue that there is an inherent bias against cultural diversity in the development project; if there is only one mode of ideal existence (the U.S.-European industrial model) then other cultures are somehow backwards or behind or “underdeveloped.” As Sachs writes, “In this view, Tuaregs, Zapotecos or Rajasthanis are not seen as living diverse and non-comparable ways of human existence, but as somehow lacking in terms of what has been achieved by the advanced countries. Consequently, catching up was declared to be their historical task. From the start, development’s hidden agenda was nothing else than the Westernization of the world.”

Development has failed on less theoretical and more concrete grounds as well: in 1960, Northern countries were 20 times richer than Southern countries; they are now 46 times richer. More devastating perhaps is the destruction of traditional ways of life and the simultaneous failure to provide a viable alternative to historic lifestyles. Sachs writes, “People are caught in the deadlock of development: the peasant who is dependent on buying seeds, yet finds no cash to do so; the mother who benefits neither from the care of her fellow women in the community nor from the assistance of a hospital. … Shunned by the advanced sector and cut off from the old ways … they are forced to get by in the no-man’s-land between tradition and modernity.”

In ‘Poverty’, ‘Production’, ‘Progress’, ‘Resources’ and ‘Science’ written by Rahnema, Robert, Sbert, Shiva and Alvares respectively, the authors argue that although scientific knowledge sharing and education has been a positive outcome of the development process, they have also resulted in severe exploitation of resources both human and natural non-renewable in nature. The lack of respect for resources by economically developed countries has led to a complete depletion in their countries which triggers them to exploit the riches of developing countries, who in the process of growth and development more than willingly let their resources sell for cheap prices in exchange for greater revenue and better GDP figures every year in their race with other developing nations to become fully developed. This exploitation has, as can be logically deduced, led to greater economic and social inequalities, reducing the absolute numbers of poverty and increasing poverty in the relative sense. Latouche elaborates upon these inequalities in his Chapter on the standards of living of people in developing countries in comparison to an average person’s standard of living in a developed country. Technology is also an area of interest to the development process and is adequately explored by Ullrich in the final chapter of the book.’

The academic style of the book may frustrate some readers who question the importance of tracing the history of certain words and concepts. As Sachs writes in his introduction, “Our essays on the central concepts in the development discourse intend to expose some of the unconscious structures that set boundaries on the thinking of our epoch. We believe that any imaginative effort to conceive a post-development era will have to overcome these constraints.”

Two chapters of particular interest are those on Socialism and the State, written by Harry Cleaver and Ashis Nandy respectively. Cleaver analyses the role of socialism in the development process. He specifically focuses on states which had previously taken up the Left ideology and had consolidated resources for themselves and had resisted the vices of the market, despite participating in it. Here he also looks at Latin American countries which are still socialist, unlike European socialism which has already disintegrated. Nandy, on the other hand, analyses the role that the State has played across all political ideologies in implementing developmental plans around the world. He critiques the oppressive nature of developed economies and urges both them and developing countries to take up a more rational approach in promoting the idea that they believe is already lost anyway.

The essays set out to challenge not only policymakers but activists of both the North and South who have fallen into using this type of language – Multinational Monitor, for example, which often refers to “developing countries.” The Development Dictionary demands that activists question their own biases and ways in which their analysis may be tainted or limited. It paves the way for a discussion in which non-Western ways of life are not seen as aberrations, but as viable alternatives.

(Abinaswar Das is a graduate student of Master of Public Policy in the National Law School of India University. He can be reached at das.abinaswar@nls.ac.in)

Samarth Bharadwaj

To uncover and understand the Mystery of Capital, Hernando De Soto through his books tries to explain to his readers why Capitalism has not been triumphant in the developing and post-communist countries and how the West has successfully generated capital in its territories. The book makes a persuasive read because of the simplicity of the revolutionary idea that it proposes which, according to the author, if sincerely applied, can lead to the creation of capital in the developing and post-communist countries. The writing style of the book is lucid and is deeply engaging for a reader interested in understanding the development paradigm of the third world and the post-communist countries. It first delves deep into the understanding of the term ‘Capital’ and then identifies the reasons for the success of capital in the west.

The book has a clear thesis which can be held onto by the reader throughout the book. The central idea of the book is a powerful one, a first of its kind: what creates capital in the West? The answer is formal property. It is the formal property systems which begin to process the assets into capital i.e. the formal property is the place where capital is born. The author himself is aware of the challenges this idea would face and wants the readers to comprehend this as an idea that is neither too complex nor too simple.

Capital, therefore, is born by representing in writing, in a title, a security, a contract, and in other such records. Hence, the ownership of the assets gets a formal registration and becomes a part of the formal legal property system. These ‘property representations enable the people to think about the assets not only through a physical acquaintance but also through the description of their latent economic and social qualities’ (p. 50). This process has made it easy for the people in the West to identify the different assets with great convenience as they do not have to physically visit a property to estimate its economic and social value. All the information related to the assets is available under one unified property system, enhancing the production of capital. But how could the simple formal recognition of property be the solution for the development of Third World and former communist nations? Continuing along the same line, De Soto argues that easy and universal access to the formal property would allow people to generate productive capital.

According to him, the West is able to successfully generate capital because the formal property structures are in place in these countries, whereas their absence in the developing and post-communist regions is the reason why capital is not being generated in these countries. He blames this on the extra-legal sectors which act as an obstacle to the creation of capital.

The solution envisioned by the book is to formalise the extra-legal sectors in the countryside and have a legal property system that incorporates the property claims of those in the extra-legal sector, giving the unrecognised assets a formal title or representation which would make them fungible and fit for capital production. This idea presented in the book is crisp and is full of promise if implemented with an ardent political will, making the idea both innovative and unique.

The author has backed his study with data collected during fieldwork in the developing and post-communist countries. The data is reliable and a rigorous methodology has been applied to collect the data as is evident from the following instance. To understand the life of a migrant in developing countries facing bureaucratic hurdles, the author set up a small and legal garment shop on the outskirts of Lima, Peru. It was found that to start a small business, it took six hours daily to get the registration processed, and finally after 289 days, the registration gets approved.

To engage the reader with perplexing concepts like Capitalism, formal property structures, the creation of capital and other technical concepts, the author relies on the usage of analogies, supplementing the simplicity of the idea being propounded. For instance using the energy analogy, De Soto takes the example of a lake on a mountain top, which has the potential energy to generate electricity only if somehow the water from the lake can be flown downwards by the engineer and converted into kinetic energy. The hydroelectric plant below the lake is where the conversion of potential energy into kinetic energy takes place, producing electricity. The assets owned by the people harbour the potential to create capital via additional production but to harness this potential energy a process is needed. To convert the asset into capital, formal property system acts as the hydroelectric plant which can transform the assets into capital. The assets reach the formal property system via a simplified legal system which ropes in all the sections of a society and the property they own.

According to the author at present, there are only twenty nations therein which capital is generated and the one thing they all have in common with each other is a formal property system where capital creation takes place. But these systems did not exist from time immemorial ranking instead they are a recent development in the Western and other developed nations. To understand this better De Soto traces the history of the United States back to the American Revolution when the thirteen colonies were under British rule.

The challenging American experience of the colonial and post-colonial authorities with the squatter settlements is exactly what the developing and post-communist countries have undergone till date. These legal authorities are engaged in a constant tussle with the extra-legal settlements, as they are seen as a hindrance to the economic progress of a nation. This notion of the legal tussle holds significance even fifteen years after it was propounded. This proves that even the mightiest producer of capital had to go through what currently the developing and former communist countries are going through.

This historical reference of the author to the social contracts in American history gives the readers a necessary break from the property and capitalist jargons. While exploring the historical aspects of the formal property system in America, the author has also mentioned the violent transformation which the United States had to pass through before it finally structured a formal property system for its citizens, inclusive of the earlier extra-legal properties. While unfolding this idea, De Soto talks about how to recognise the extra-legal sector in the first place, as the assets they own are mere physical representations and are not representative of their legal characteristics.

Though the book has managed to give an innovative idea to the solution of the mystery of capital, the author has not stopped at merely discussing the solution but has also given an elaborate list of steps, which if followed can remedy the problem of absence of a formal property structure and capital creation in a society (p. 168-169).

While trying to understand the role of property in capital creation, the author prescribes that if capital has to be created, it can only be done if there is a formal property structure in place. This over-simplification of the process of capital creation can hit the reader and cultivate a sense of suspicion in their mind whilst they try to grasp this notion throughout the book.

The ideas presented in the book make the readers examine capitalism from a new lens, where the author is not merely talking about the positive or negative aspects of capitalism or criticising the communist regime. The author believes capitalism is in crisis outside the Western world, not because international globalisation is failing, but because the developing and post-communist countries have not been able to globalise the capital within their own territories. While the majority of the population outside the bell jar view capitalism as a private club discriminating against them in every way possible, the author believes the system of capitalism is in itself not flawed, only its promoters are arrogant and drunk on their victory over communism, and they are yet to understand that their macroeconomics reforms are not enough.

The book can be suggested for both the Capitalists and the Marxists. The author himself claims that he is not a die-hard capitalist and does not view capitalism as a credo. Yet while promoting the idea of reviving the capitalist systems in the developing nations because ‘capitalism is the only game in town’, he talks about the ghost of Marx which haunts us in this era, where proletariat uprising can happen any moment if the bell jar is not lifted and masses are not given access to the legal property systems. This ideological balance of the author is clear and stable throughout the book.

Finally, the innovative and revolutionary ideas propounded by Hernando De Soto, are eye catching and one can stumble upon their simplicity whilst understanding the role of property systems in the development process in developing and post-communist countries. Yet the sole reliance of the author on just one aspect of capital creation gives a narrow appeal to the narrative of capitalism. It can be qualified as an essential condition for the development process but it cannot be placed as a pre-condition to the development paradigm.

(Samarth Bharadwaj is a graduate student of Master of Public Policy in the National Law School of India University. He can be reached at samarthb@nls.ac.in)

Vivek Raj Anand

Background

Aurelio Peccei, an Italian scholar and industrialist, looked at the contemporary national crisis of the 20th century as symptoms of a larger insidious global crisis. He founded the Club of Rome, a virtual think tank —consisting of scientists, educators, humanists, and businessmen who were concerned with global issues— in 1968. Peccei believed that the new problems faced by humanity could not be categorised solely as economic, ecological, social or security problems. Rather, each problem is multi-faceted, where all the aspects are interconnected and interacting amongst themselves. It is the design of these interconnections and patterns of interactions that determine the nature of such dynamic global problems. Furthermore, cause-effect relationships inherent in such problems are counter-intuitive in nature, as the human mind has not gathered requisite intuition for understanding complex systems. Human intuition is trained to work in the context of simple systems; however, complex systems like Earth do not behave in the same way. Dynamic correlations between various subsystems determine the behaviour of complex systems.

System Dynamics is the science that studies interconnections between complex systems and Peccei wanted a system dynamics based scientific simulation model to forecast the future of humanity and planet earth. Dennis Meadows, a professor at MIT Sloan School of Management, took up the project of constructing a simulation model, with funds coming from Volkswagen Foundation.

The team worked on the hypothesis that unlimited growth —propelled by population, industrialisation, pollution, food production and non-renewable resource utilization— is not sustainable because of the limited physical endowment of planet earth. The outcome of this project has been described in this book “Limits to Growth”.

Exponential Growth

Modern economics presume that despite the peaks and troughs of business cycles, economies would always continue to grow in the long term. This book rebuts the aforesaid presumption of perpetual growth and ascribes the reason to the finiteness of Earth’s physical resources, which would eventually exhaust due to exponential growth in material demand. While authors acknowledge the diminishing marginal utility of material consumption —only after having met the threshold limit necessary for ensuring the basic well-being, the argument presented by the unrestrained growth is not on ethical or ideological grounds.

The book explains the concept of exponential function in a rather lucid and non-mathematical manner, and provides an intuitive understanding of reasons behind the exponential growth in population and industrial output through the use of “feedback loops”. The study group observed the dominance of positive feedback loops in all the studied variables – population, industrial output, pollution, food production and non-renewable resource utilisation.

Further, the book juxtaposes exponential growth in aforesaid variables with a decline of finite physical resources of the planet, so as to ascertain the overshoot[1] and cross point. Those physical resources determine the carrying capacity of the planet, and are hence the ‘Limits to growth’.

Scenarios

The mandate of the research was not to make a doomsday prediction. Rather, it was a mathematical modelling exercise whereby endogenous variables like population growth, industrial output, pollution, food production and non-renewable resources were iterated so as to project different future scenarios of the world. The iterations of these variables represent different growth trajectories adopted by world economies, and hence it was left to mankind to choose a particular trajectory. The team developed twelve such scenarios, which included the collapse scenarios and the equilibrium ones.

The book concluded that human ecological footprint, if unchecked, would grow beyond the carrying capacity of globe i.e. what planet can provide on a sustainable basis. In the long run, it is impossible that humanity can use more physical resources and generate more emissions every year than what nature is capable of supplying and absorbing in a sustainable manner. As demand can never overshoot supply, the human ecological footprint will eventually decline either through “managed decline” or through “collapse” to sustainable levels. An example of managed decline would be limiting the annual catch of fish to a sustainable limit through legislation. An example of the latter would be the elimination of fishing communities because there are no more fish left in water bodies. The authors also argued that while market, technology and government are capable of making positive interventions, such interventions would only defer the crisis and not solve the problem, as long as there is no check on exponential growth. Hence, the cross and overshoot will still happen, but only at a later date.

Standard run. The model was tested under various assumptions, beginning with the “standard run”.Standard run assumes business as usual conditions as it existed in 1972, i.e. in the next one hundred years, there will be no significant changes in the nature of growth in the five variables. Not too surprisingly, the model projected disaster long before the end of the twenty-first century because of complete exhaustion of resources (Refer Figure 1).

Figure 1 Standard Run – Business as usual – Resource exhaustion

Succeeding runs These were made with more favourable assumptions, but all indicated collapse within a hundred years.

Stable model or Equilibrium. The study group wanted their proposed model to be self-sustaining —sustainable without sudden and uncontrollable collapse— and at the same time capable of satisfying the basic material requirements of the world. Authors called such a state as ‘Equilibrium’, a state where population and capital are stable, and the forces tending to increase or decrease them are in a carefully controlled balance. This is possible when birth rate equals the death rate and capital investment rate equals the depreciation rate. Now, this equilibrium —i.e stable population and capital— can be at high or low levels of population and capital. Authors say that the level of capital and population, and the ratio of the two, should be set in accordance with the values of society. They may be deliberately revised and slowly adjusted as the advance of technology creates new options. (Refer Figure 2).

Figure 2 Sustainable development or Equilibrium Scenarios

Authors claim that this equilibrium does not refer to the stagnation of an economy; rather, it is dynamic in nature. Within stable population and capital, corporations could expand or fail, local population could increase or decrease. Services provided by a constant stock of capital would continue to increase due to technological advances. Besides that, human activities that do not require a large flow of irreplaceable resources or cause severe environmental degradation might continue to grow indefinitely. In fact those pursuits which are most desirable and satisfying like education, art, music, religion, basic scientific research, athletics and social interaction could flourish. This could be made possible through an increase in leisure. Such increase in leisure can be made possible only through improvement in production methods using technology. This increased leisure time could be devoted to any activity that is relatively non-consuming and non-polluting.

Readability and Limitations

The book has been suitably written so that general public can understand a rather complex subject matter of system dynamics based simulation model. Mathematical concepts like exponential growth, compounding effect, etc. have been explained in an intuitive manner. However, readers who do not have exposure to mathematical modelling will face difficulty in understanding the scenarios developed by the team.

The book can be critiqued on multiple accounts, more specifically on its assumptions and simplifications made in the model. Authors themselves acknowledge that there are many imperfections in the model, and the same can always be improved upon. However, all those critical comments belong to a single genre, which is the limitation of any modelling exercise conducted in social sciences. No model can truly predict the future that is related to human actions or inactions. Furthermore, history has always advanced through lurching discontinuities, most of them were utterly unpredictable and hence they are not programmable.

Conclusion

The book has significant policy implications, especially for problems that are global in nature. It also exhibits the power of data analytics and computer simulation in making objective future projections. No model can fully represent the complexity of a society that consists of human beings who are invariably guided by bounded rationality and whose response is extremely dynamic. Moreover, no mathematical model can factor in all the tangible and intangible variables that determine human actions or inactions. However, the world model developed by Dennis Meadows’ team was successful in providing a heads-up to an ensuing crisis if business as usual continues. Such a heads up is all the more important for phenomenon related to complex systems with high time-constants as it warrants forthwith action. The book projects a crisis that is a necessary —but certainly not sufficient— condition for inspiring policy actions.